Question A:
Having companies run to maximize shareholder value creates significant negative externalities for workers and communities.
Responses
© 2025. Kent A. Clark Center for Global Markets.
5%
0%
5%
42%
19%
28%
2%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
6%
45%
18%
29%
3%
Question B:
Appropriately managed corporations could create significantly greater value than they currently do for a range of stakeholders – including workers, suppliers, customers and community members – with negligible impacts on shareholder value.
Responses
© 2025. Kent A. Clark Center for Global Markets.
5%
0%
21%
30%
26%
16%
2%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
26%
30%
23%
19%
2%
Question C:
Effective mechanisms for boards of directors to ensure that CEOs act in ways that balance the interests of all stakeholders would be straightforward to introduce.
Responses
© 2025. Kent A. Clark Center for Global Markets.
5%
0%
28%
53%
12%
2%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
34%
56%
8%
2%
0%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 John Campbell |
Harvard | Bio/Vote History | ||
|
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 John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
|
Question misuses "externality." Voluntary market transactions are not externalities. Having? Absence of government coercion is not "having."
|
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 Francesca Cornelli |
Northwestern Kellogg | Bio/Vote History | ||
|
It is impossible to make an encompassing statement valid for all industries
-see background information here -see background information here |
||||
 Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
|
Alternative forms of governance do not address externalities directly. Corporate reputation and shareholder governance is sufficient.
|
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
|
This is the point of regulation. For examples, pollution and labor regulations are intended to mitigate such effects.
|
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 Janice Eberly |
Northwestern Kellogg | Bio/Vote History | ||
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Could have more confidence if comparing to a real alternative or counterfactual.
|
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 Kenneth R. French |
Tuck Dartmouth | Bio/Vote History | ||
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 Xavier Gabaix |
Harvard | Bio/Vote History | ||
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There are always pecuniary externalities. From firms to workers they're typically *positive*: more capital is better for workers.
|
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 Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
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 John Graham |
Duke Fuqua | Bio/Vote History | ||
|
One can not maximize shareholder value without considering other stakeholders. There might be externalities but probably not significant
|
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 Lars Hansen |
UChicago | Bio/Vote History | ||
|
Negative externalities inflicted by corporate activity are best handled with well designed legal structures and Piguovian taxation.
|
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 Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
|
Did you mean "statistically" significant? Using the word 'significant', influences the response.
|
||||
 David Hirshleifer |
USC | Bio/Vote History | ||
|
Thriving and competitive businesses probably tends to generate positive externalities for the community.
|
||||
 Harrison Hong |
Columbia | Bio/Vote History | ||
|
Workers are affected by externalities from firm production such as carbon emissions, which lead to global warming and extreme weather.
|
||||
 Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
|
Shareholder value, unlike stock price, is a long-term concept that incorporates all constituencies that are important to business success.
|
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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sometimes, but doubtful that this is pervasive
|
||||
 Ralph Koijen |
Chicago Booth | Bio/Vote History | ||
|
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||||
 Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
|
If the regulatory environment penalizes eggregious negative firm externalities, firms can maximize shareholder value without hurting others.
|
||||
 Andrew Lo |
MIT Sloan | Bio/Vote History | ||
|
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||||
 Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
|
This is the motivation for regulation, including regulation related to labor, the environment, and antitrust
|
||||
 Sydney Ludvigson |
NYU | Bio/Vote History | ||
|
Redistributive shocks matter. They have persistently redistributed rewards to shareholders and away from workers in the last 30-40 years
-see background information here |
||||
 Matteo Maggiori |
Stanford GSB | Bio/Vote History | ||
|
|
||||
 Gregor Matvos |
Northwestern Kellogg | Bio/Vote History | ||
|
Depends on context. Ex. with poor environmental regulation, a profit maximizing company will pollute. With effective regulation, it won’t.
|
||||
 Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
|
It's not clear theoretically that "significant negative externalities" would be created and I'm not aware of strong empirical work showing.
|
||||
 Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
|
There is no reason why shareholder max. should lead firms to internalize these externalities (unless, e.g., incentivized by regulation).
|
||||
 Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
|
Profit maximization leads to productivity and economic growth but also, absent enforcement, to less competition and more carbon emissions.
|
||||
 Christine Parlour |
Berkeley Haas | Bio/Vote History | ||
|
It depends on the industry. Some generate negative externalities (social and environmental), while others generate large consumer benefits.
|
||||
 Thomas Philippon |
NYU Stern | Bio/Vote History | ||
|
Unless government taxes/subsidies perfectly cancel all externalities, including market power, maximizing SV is not socially optimal.
|
||||
 Manju Puri |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
|
|
||||
 Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
|
Weakly agree. Maximizing shareholder value can create negative externalities for other stakeholders, but the effects are heterogeneous.
|
||||
 Paola Sapienza |
Hoover Institution Stanford | Bio/Vote History | ||
|
Certain companies generate very negative externalities, but the statement is not valid in general
|
||||
 Amit Seru |
Stanford GSB | Bio/Vote History | ||
|
Depends
|
||||
 Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
|
Depends on the regulatory environment in which companies maximize shareholder value.
|
||||
 Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
|
|
||||
 Jeremy Stein |
Harvard | Bio/Vote History | ||
|
|
||||
 Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
|
|
||||
 René Stulz |
OSU Fisher School | Bio/Vote History | ||
|
Shareholder wealth maximization can make both workers and communities better off. Neither workers nor communities benefit from failing firms
|
||||
 Amir Sufi |
Chicago Booth | Bio/Vote History | ||
|
There are examples in which shareholder maximization has led to negative externalities, but hard to argue this is a rule.
|
||||
 Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
|
There are clearly instances where their are externalities associated with corporate actions, but this is not the general rule
|
||||
 Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
|
Climate externalities are good example of something shareholder value maximization typically ignores. Short-termism of shareholders another.
|
||||
 Ingrid M. Werner |
OSU Fisher School | Bio/Vote History | ||
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||||
 Toni Whited |
UMich Ross School | Bio/Vote History | ||
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||||
Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
John Campbell |
Harvard | Bio/Vote History | ||
|
Negative externalities to stakeholders are likely meaningful, but correcting them through "appropriate management" is easier said than done.
|
||||
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John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
|
Horrible question. "Appropriately managed" can increase value for all. But by who? Question implies government. Sentences with subjects pls!
|
||||
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Francesca Cornelli |
Northwestern Kellogg | Bio/Vote History | ||
|
There are several instances where shareholders' value can focus on short term goals only, while a longer term approach can improve value
-see background information here |
||||
|
Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
|
If there is a large difference in actions, given reputation, there would be a large effect on shareholder value.
|
||||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
|
Hard to know. But if true, this would imply almost no mis-alignment of incentives between shareholders and the others. That seems unlikely.
|
||||
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Janice Eberly |
Northwestern Kellogg | Bio/Vote History | ||
|
Appropriately managed seems unclear/aspirational if the goal is the create additional value. It would be interesting to know what changes.
|
||||
|
Kenneth R. French |
Tuck Dartmouth | Bio/Vote History | ||
|
|
||||
|
Xavier Gabaix |
Harvard | Bio/Vote History | ||
|
Very doubtful, except for a few cases like (i) local monopsony power (ii) pollution and such externalities.
|
||||
|
Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
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John Graham |
Duke Fuqua | Bio/Vote History | ||
|
some value could possibly be created for other stakeholders -- but not significantly more
|
||||
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Lars Hansen |
UChicago | Bio/Vote History | ||
|
Some corporations are poorly managed. But I fail to see an alternative that dominates without confronting tradeoffs among stakeholders.
|
||||
|
Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
|
|
||||
|
David Hirshleifer |
USC | Bio/Vote History | ||
|
A target of serving a range of stakeholders gives managers license to pursue their own preferences and self-interest.
|
||||
|
Harrison Hong |
Columbia | Bio/Vote History | ||
|
Externalities such as global warming are costly to address, and require carbon taxes or sustainable finance mandates which cost shareholders
|
||||
|
Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
|
If office temperature could dial up five degrees in summer, everybody--workers, shareholders, and Planet--is better off. Just an example.
|
||||
|
Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
There is no reason to think that firms are as inefficient as an affirmative answer would imply.
|
||||
|
Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Ralph Koijen |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
|
There are trade-offs when trying to please several types of stakeholders.
|
||||
|
Andrew Lo |
MIT Sloan | Bio/Vote History | ||
|
|
||||
|
Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
|
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||||
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Sydney Ludvigson |
NYU | Bio/Vote History | ||
|
Boards could probably maximize value for a wider range of stakeholders, but not enough evidence to know how this would affected shareholders
|
||||
|
Matteo Maggiori |
Stanford GSB | Bio/Vote History | ||
|
|
||||
|
Gregor Matvos |
Northwestern Kellogg | Bio/Vote History | ||
|
Companies benefit from a pro-stakeholder reputation. If such actions have negligible cost to shareholders, they want to implement them.
|
||||
|
Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
|
Hard to imagine creating significant additional value for stakeholders without significant drop in share value.
|
||||
|
Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
|
Seems unlikely to be possible without some cost for shareholders
|
||||
|
Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
|
Corporate management is responding well to the legal environment that makes it profitable to act non-competitively, to pollute, etc.
|
||||
|
Christine Parlour |
Berkeley Haas | Bio/Vote History | ||
|
Changing inefficient companies can increase value to various stakeholders. Changing efficient companies just moves value among groups.
|
||||
|
Thomas Philippon |
NYU Stern | Bio/Vote History | ||
|
Maximizing SV is unlikely to be first best, but interventions, except pro-competition ones, are likely to create significant costs as well.
|
||||
|
Manju Puri |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
|
What exactly does "appropriately managed" mean and who decides?
|
||||
|
Paola Sapienza |
Hoover Institution Stanford | Bio/Vote History | ||
|
general statement, it does not apply to firms creating large externalities (e.g polluters), which are not the majority of firms
|
||||
|
Amit Seru |
Stanford GSB | Bio/Vote History | ||
|
Unlikely, unless one believes host of firms are poorly governed.
|
||||
|
Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
|
Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
|
It is not clear that it would be negligible costs. Also I would somewhat agree with the statement but that wasn't an option.
|
||||
|
Jeremy Stein |
Harvard | Bio/Vote History | ||
|
|
||||
|
Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
|
|
||||
|
René Stulz |
OSU Fisher School | Bio/Vote History | ||
|
|
||||
|
Amir Sufi |
Chicago Booth | Bio/Vote History | ||
|
Again, hard to state this as a rule. There are certainly firms for which the statement could be true.
|
||||
|
Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
|
There are always tradeoffs
|
||||
|
Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
|
Good management focused on the long-run health and well-being of the company, its employees, and its community attracts the best resources.
|
||||
|
Ingrid M. Werner |
OSU Fisher School | Bio/Vote History | ||
|
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||||
|
Toni Whited |
UMich Ross School | Bio/Vote History | ||
|
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||||
Question C Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
John Campbell |
Harvard | Bio/Vote History | ||
|
It is extremely difficult to incentivize CEOs to consider all stakeholders without empowering them to pursue their own selfish interests.
|
||||
|
John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
|
Passive agian. By who? By boards or by regulators? Interests are traded, not balanced. A gains, B loses. Owners pillaged, golden goose dies
|
||||
|
Francesca Cornelli |
Northwestern Kellogg | Bio/Vote History | ||
|
There are measures that would not solve all the problems but would definitely bring to an improvement
-see background information here |
||||
|
Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
|
I do not see an easy way to provide alternative goals. It will become political.
|
||||
|
Darrell Duffie |
Stanford | Bio/Vote History | ||
|
This doesn't seem "straightforward." It would be complicated to balance the potential conflicts of interests among all stakeholders.
|
||||
|
Janice Eberly |
Northwestern Kellogg | Bio/Vote History | ||
|
Related to the previous question - how would board effectiveness change in practice?
|
||||
|
Kenneth R. French |
Tuck Dartmouth | Bio/Vote History | ||
|
Shareholder value maximization is the least ambiguous and most well defined of the many alternative objectives I have seen.
|
||||
|
Xavier Gabaix |
Harvard | Bio/Vote History | ||
|
Some innovations would be good (e.g. local externalities), but the scope is government policy, not board structure
|
||||
|
Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
|
John Graham |
Duke Fuqua | Bio/Vote History | ||
|
1) often hard to measure stakeholder welfare; 2) an 'end around' can occur relative to an explicit measure/variable to negate the intent
|
||||
|
Lars Hansen |
UChicago | Bio/Vote History | ||
|
The term ``balance’’ is not operational without resolving tradeoffs among stake holders in arbitrary and potentially harmful ways.
|
||||
|
Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
|
|
||||
|
David Hirshleifer |
USC | Bio/Vote History | ||
|
|
||||
|
Harrison Hong |
Columbia | Bio/Vote History | ||
|
Unclear if boards are meant to replace regulation, taxes or other forms of external market signals.
|
||||
|
Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
|
|
||||
|
Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
it is a hornet's nest
-see background information here |
||||
|
Ralph Koijen |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
|
Corporate governance is hard to do even when the objective is simple (maximize share price). Not to mention when the objective is complex.
|
||||
|
Andrew Lo |
MIT Sloan | Bio/Vote History | ||
|
|
||||
|
Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
|
|
||||
|
Sydney Ludvigson |
NYU | Bio/Vote History | ||
|
Not aware of many good examples of this
|
||||
|
Matteo Maggiori |
Stanford GSB | Bio/Vote History | ||
|
This is a complex problem theoretically, with in practice many political and practical implementation limitations. Not straightforward.
|
||||
|
Gregor Matvos |
Northwestern Kellogg | Bio/Vote History | ||
|
Mechanisms for boards of directors can struggle to balance shareholder interests, whose goals are much more aligned than stakeholders’
|
||||
|
Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
|
Very hard to answer this question without having more evidence on the first two questions and how value is created for other stakeholders.
|
||||
|
Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
|
There is no simple way to entirely change corporate governance. It would be a mess like Brexit.
|
||||
|
Christine Parlour |
Berkeley Haas | Bio/Vote History | ||
|
Incentives are agreed on before complex situations arise. Balancing all possible interests and future events is almost impossible.
|
||||
|
Thomas Philippon |
NYU Stern | Bio/Vote History | ||
|
They may be feasible, they are certainly not easy to implement.
|
||||
|
Manju Puri |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
|
Challenging to ensure managers are aligned with shareholders. Adding additional interests will likely complicate matters even if worthwhile.
|
||||
|
Paola Sapienza |
Hoover Institution Stanford | Bio/Vote History | ||
|
When the conflict between shareholder maximization and societal goals emerge, the board should not choose, better to let society regulate
|
||||
|
Amit Seru |
Stanford GSB | Bio/Vote History | ||
|
|
||||
|
Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
|
Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
|
Boards have many mechanisms to provide incentives for CEOs but there exists a lot of uncertainty regarding their efficacy.
|
||||
|
Jeremy Stein |
Harvard | Bio/Vote History | ||
|
|
||||
|
Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
|
|
||||
|
René Stulz |
OSU Fisher School | Bio/Vote History | ||
|
I am not convinced that the mechanisms proposed so far would work.
|
||||
|
Amir Sufi |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
|
|
||||
|
Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
|
Boards are imperfect governance devices, often co-opted and controlled by senior management.
|
||||
|
Ingrid M. Werner |
OSU Fisher School | Bio/Vote History | ||
|
|
||||
|
Toni Whited |
UMich Ross School | Bio/Vote History | ||
|
|
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